Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 1,980, S&P 500 index)

Our intraday outlook is bearish, and our short-term outlook is bearish:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish

The U.S. stock market indexes gained 0.4-0.7% on Tuesday, extending their recent move up, as investors reacted to quarterly corporate earnings reports and economic data announcements. The S&P 500 index trades above the level of 2,100 again. The nearest important resistance level is at around 2,120, and the next level of resistance is at 2,130-2,135, marked by May 20 all-time high of 2,134.72. On the other hand, support level remains at 2,090-2,100, among others. There is no clear medium-term direction, as the index continues to fluctuate along the level of 2,100:

Expectations before the opening of today's trading session are virtually flat, with index futures currently up 0.1%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Producer Price Index, Empire Manufacturing Index at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., Crude Inventories at 10:20 a.m., Fed's Beige Book release at 2:00 p.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following yesterday's move up. The nearest important resistance level is at around 2,110, and support level is at 2,090-2,100, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) remains within a similar intraday consolidation, following recent rally. The nearest important level of resistance is at 4,530-4,550, marked by all-time highs. On the other hand, support level is at 4,500, among others, as we can see on the 15-minute chart:

Concluding, the broad stock market continued its short-term uptrend yesterday, as investors reacted to quarterly earnings reports, economic news releases. We continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a medium-term downward correction or an uptrend reversal. Stop-loss is at 2,140, and potential profit target is at 1,980. You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.

Thank you.

Paul Rejczak
Stock Trading Strategist
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